The impact of urban renewal on neighboring housing prices: an application of hierarchical linear modeling
Abstract
This study explored the impacts of urban renewal projects on neighboring housing prices. Hierarchical linear modeling (HLM) was employed to analyze urban renewal projects in Taipei City. The Level 1 independent variables pertained to a house itself (19,157 pieces of data), such as its structure and neighborhood attributes. The Level 2 variable pertained to an urban renewal project (23 cases of urban renewal), and the explanatory variable was the scale of each urban renewal project. The study examined whether differences exist between the impacts of various urban renewal projects on neighboring housing prices, and analyzed the extent to which the differences in neighboring housing prices are caused by the differences between urban renewal projects. The empirical results showed that the mean housing price varies significantly between each urban renewal project. In regard to the variance in the mean house price, 31.46% was caused by the differences between the urban renewal projects. The estimated coefficient of the grand floor area of urban renewal (FLAREA) had a positive value and attained a 1% level of significance. This indicates that the larger the scale of an urban renewal project, the larger its effects on neighboring housing prices. The empirical results of this study could better explain the impacts of the scale of an urban renewal project on the externalities of urban renewal.
First published online 17 January 2022
Keyword : urban renewal, housing prices, grand floor area, scale of an urban renewal project, hierarchical linear modelling
How to Cite
Lee, C.-C., Liang, C.-M., Yeh, W.-C., & Yu, Z. (2022). The impact of urban renewal on neighboring housing prices: an application of hierarchical linear modeling. International Journal of Strategic Property Management, 26(1), 11-23. https://doi.org/10.3846/ijspm.2022.15971
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Christiansen, P., Engebretsen, Ø., Fearnley, N., & Hanssen, J. U. (2017). Parking facilities and the built environment: impacts on travel behaviour. Transportation Research Part A: Policy and Practice, 95, 198–206. https://doi.org/10.1016/j.tra.2016.10.025
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Hyra, D. (2008). The new urban renewal: the economic transformation of Harlem and Bronzeville. University of Chicago Press.
Jones, K., & Bullen, N. (1994). Contextual models of urban house prices: a comparison of fixed-and random-coefficient models developed by expansion. Economic Geography, 70(3), 252–272. https://doi.org/10.2307/143993
Jones, P. (2008). Different but the same? Post-war slum clearance and contemporary regeneration in Birmingham, UK. City, 12(3), 356–371. https://doi.org/10.1080/13604810802478987
Knaap, G. J., Ding, C., & Hopkins, L. D. (2001). Do plans matter? The effects of light rail plans on land values in station areas. Journal of Planning Education and Research, 21(1), 32–39. https://doi.org/10.1177/0739456X0102100103
Lai, L. W., Chau, K. W., & Cheung, P. A. C. (2018). Urban renewal and redevelopment: social justice and property rights with reference to Hong Kong’s constitutional capitalism. Cities, 74, 240–248. https://doi.org/10.1016/j.cities.2017.12.010
Lee, C. C. (2010). The impact of facilities of leisure and sports on housing prices in Taiwan: an application of hierarchical linear modeling. Journal of Real Estate Practice and Education, 13(2), 159–175. https://doi.org/10.1080/10835547.2010.12091674
Lee, C. C., Liang, C. M., & Chen, C. Y. (2017). The Impact of urban renewal on neighborhood housing prices in Taipei: an application of the difference-in-difference. Journal of Housing and the Building Environment, 32(3), 407–428. https://doi.org/10.1007/s10901-016-9518-1
Liang, C. M., Lee, C. C., & Yong, L. R. (2020). Impacts of urban renewal on neighborhood housing prices: predicting response to psychological effects. Journal of Housing and the Built Environment, 15, 191–213. https://doi.org/10.1007/s10901-019-09673-z
Lin, T. T. (2000). Land prices and floor area ratios [Master’s thesis]. National Cheng Kung University, Graduate Institute of Urban Planning, Tainan City.
Mori, C. (2017). Social housing and urban renewal in Tokyo: from post-war reconstruction to the 2020 Olympic Games. In P. Watt & P. Smets (Eds.), Social housing and urban renewal (pp. 277–309). Emerald Publishing Limited. https://doi.org/10.1108/978-1-78714-124-720171008
Musakwa, W., & Niekerk, A. V. (2013). Implications of land use change for the sustainability of urban areas: a case study of Stellenbosch, South Africa. Cities, 32, 143–156. https://doi.org/10.1016/j.cities.2013.01.004
Nelson, J. P. (2004). Meta-analysis of airport noise and hedonic property values. Journal of Transport Economics and Policy, 38(1), 1–27.
Pov, S., Kawai, N., & Murakami, R. (2020). Identifying causes of lower secondary school dropout in Cambodia: a two-level hierarchical linear model. International Journal of Inclusive Education, 1–14. https://doi.org/10.1080/13603116.2020.1735542
Rosenthal, S. S. (2008). Old homes, externalities, and poor neighborhoods a model of urban decline and renewal. Journal of Urban Economics, 63(3), 816–840. https://doi.org/10.1016/j.jue.2007.06.003
Simons, R. A., & Jaouhari, E. A. (2004). The effect of freight railroad tracks and train activity on residential property values. Appraisal Journal, 72(3), 223–233.
Simons, R., Quercia, R., & Levin, I. (1998). The value impact of new residential construction and neighborhood disinvestment on residential sales price. Journal of Real Estate Research, 15(2), 147–161. https://doi.org/10.1080/10835547.1998.12090921
So, H. M., Tse, R. Y., & Ganesan, S. (1997). Estimating the influence of transport on house prices: evidence from Hong Kong. Journal of Property Valuation and Investment, 15(1), 40–47. https://doi.org/10.1108/14635789710163793
Sunak, Y., & Madlener, R. (2016). The impact of wind farm visibility on property values: a spatial difference-in-differences analysis. Energy Economics, 55, 79–91. https://doi.org/10.1016/j.eneco.2015.12.025
Uitermark, J., & Loopmans, M. (2013). Urban renewal without displacement? Belgium’s ‘housing contract experiment’ and the risks of gentrification. Journal of Housing and the Built Environment, 28(10), 157–166. https://doi.org/10.1007/s10901-012-9299-0
Uyar, B., & Brown, K. (2007). Neighborhood affluence, school-achievement scores, and housing prices: cross-classified hierarchies and HLM. Journal of Housing Research, 16(2), 97–116. https://doi.org/10.1080/10835547.2007.12091980
Wang, H., Shen, Q., Tang, B. S., & Skitmore, M. (2013). An integrated approach to supporting land-use decisions in site redevelopment for urban renewal in Hong Kong. Habitat International, 38, 70–80. https://doi.org/10.1016/j.habitatint.2012.09.006
Wilhelmsson, M. (2008). House price depreciation rates and level of maintenance. Journal of Housing Economics, 17(1), 88–101. https://doi.org/10.1016/j.jhe.2007.09.001
Xu, W., Jin, X., Liu, J., & Zhou, Y. (2021). Analysis of influencing factors of cultivated land fragmentation based on hierarchical linear model: a case study of Jiangsu Province, China. Land Use Policy, 101, 105119. https://doi.org/10.1016/j.landusepol.2020.105119
Yalpir, S., & Bayrak, E. (2017). Real estate valuation in urban regeneration application: case study of Konya. Selcuk University Journal of Engineering, Science and Technology, 5(1), 96–103. https://doi.org/10.15317/Scitech.2017.73
Yau, Y., Wong, S. K., Cheung, K. C., Chau, K. W., & Ho, D. C. W. (2006). An empirical study on the neighbourhood effect of refurbishment [Conference presentation]. Proceedings from the Pacific Rim Real Estate Society Conference 2006. Pacific Rim Real Estate Society.
Zahirovich-Herbert, V., & Gibler, K. M. (2014). The effect of new residential construction on housing prices. Journal of Housing Economics, 26, 1–18. https://doi.org/10.1016/j.jhe.2014.06.003
Zheng, X., Li, J. X., Zheng, L., & Lv, J. (2020). Multi-owned property, urban renewal and neighborhood property value externalities: revisiting the Hong Kong case. Cities, 107, 102915. https://doi.org/10.1016/j.cities.2020.102915
Zient, J., Zient, E. N., & Sirmans, G. S. (2008). Determinants of house prices: a quantile regression aggregation bias. Journal of Real Estate Finance and Economics, 37(4), 317–333. https://doi.org/10.1007/s11146-007-9053-7
Arribas, I., García, F., Guijarro, F., Oliver, J., & Tamošiūnienė, R. (2016). Mass appraisal of residential real estate using multilevel modelling. International Journal of Strategic Property Management, 20(1), 77–87. https://doi.org/10.3846/1648715X.2015.1134702
Baltagi, B. H., & Bresson, G. (2011). Maximum likelihood estimation and Lagrange multiplier tests for panel seemingly unrelated regressions with spatial lag and spatial errors: an application to hedonic housing prices in Paris. Journal of Urban Economics, 69(1), 24–42. https://doi.org/10.1016/j.jue.2010.08.007
Basu, S., & Thibodeau, T. G. (1998). Analysis of spatial autocorrelation in house prices. Journal of Real Estate Finance and Economics, 17(1), 61–85. https://doi.org/10.1023/A:1007703229507
Brown, K., & Uyar, B. (2004). A hierarchical linear model approach for assessing the effects of house and neighborhood characteristics on housing prices. Journal of Real Estate Practice and Education, 7(1), 15–24. https://doi.org/10.1080/10835547.2004.12091603
Chang, Y. S., Lin, Y. J., Liu, L. L., Shiue, M. J., & Wheatley, C. M. (2018). The use of hierarchical linear modeling to address lack-of-independence in empirical auditing research. European Accounting Review, 27(1), 185–196. https://doi.org/10.1080/09638180.2016.1248459
Chau, K. W., & Wong, S. K. (2014). Externalities of urban renewal: a real option perspective. Journal of Real Estate Finance and Economics, 48(3), 546–560. https://doi.org/10.1007/s11146-013-9418-z
Chau, K. W., Wong, S. K., Leung, A. Y. Y., & Yiu, C. Y. (2003). Estimating the value enhancement effects of refurbishment. Facilities, 21(1/2), 13–19. https://doi.org/10.1108/02632770310460504
Chen, T. Y., & Jou, R. C. (2019). Using HLM to investigate the relationship between traffic accident risk of private vehicles and public transportation. Transportation Research Part A: Policy and Practice, 119, 148–161. https://doi.org/10.1016/j.tra.2018.11.005
Chien, S. P., & Wu, H. K. (2020). Examining influences of science teachers’ practices and beliefs about technology-based assessment on students’ performances: a hierarchical linear modeling approach. Computers & Education, 157, 103986. https://doi.org/10.1016/j.compedu.2020.103986
Christiansen, P., Engebretsen, Ø., Fearnley, N., & Hanssen, J. U. (2017). Parking facilities and the built environment: impacts on travel behaviour. Transportation Research Part A: Policy and Practice, 95, 198–206. https://doi.org/10.1016/j.tra.2016.10.025
Cohen, J. (1998). Statistical power analysis for the behavioral sciences. Lawrence Erlbaum Associates.
Comber, S., & Arribas-Bel, D. (2017). “Waiting on the train”: the anticipatory (causal) effects of Crossrail in Ealing. Journal of Transport Geography, 64, 13–22. https://doi.org/10.1016/j.jtrangeo.2017.08.004
Dai, X., Bai, X., & Xu, M. (2016). The influence of Beijing rail transfer stations on surrounding housing prices. Habitat International, 55, 79–88. https://doi.org/10.1016/j.habitatint.2016.02.008
Do, M. H., & Park, S. C. (2018). New rural development and hierarchical governance in Vietnam: impacts of government support on rural households’ income using a hierarchical linear modelling. AGRIS on-line Papers in Economics and Informatics, 10(4), 3–15. https://doi.org/10.7160/aol.2018.100401
Freybote, J., & Fruits, E. (2015). Perceived environmental risk, media, and residential sales prices. Journal of Real Estate Research, 37(2), 217–244. https://doi.org/10.1080/10835547.2015.12091413
Guidry, K., Shilling, J. D., & Sirmans, C. F. (1999). Land-use controls, natural restrictions, and urban residential land prices. Review of Regional Studies, 29(2), 105–114. https://doi.org/10.52324/001c.8828
Huang, B., Wu, B., & Barry, M. (2010). Geographically and temporally weighted regression for modeling spatio-temporal variation in house prices. International Journal of Geographical Information Science, 24(3), 383–401. https://doi.org/10.1080/13658810802672469
Hyra, D. (2008). The new urban renewal: the economic transformation of Harlem and Bronzeville. University of Chicago Press.
Jones, K., & Bullen, N. (1994). Contextual models of urban house prices: a comparison of fixed-and random-coefficient models developed by expansion. Economic Geography, 70(3), 252–272. https://doi.org/10.2307/143993
Jones, P. (2008). Different but the same? Post-war slum clearance and contemporary regeneration in Birmingham, UK. City, 12(3), 356–371. https://doi.org/10.1080/13604810802478987
Knaap, G. J., Ding, C., & Hopkins, L. D. (2001). Do plans matter? The effects of light rail plans on land values in station areas. Journal of Planning Education and Research, 21(1), 32–39. https://doi.org/10.1177/0739456X0102100103
Lai, L. W., Chau, K. W., & Cheung, P. A. C. (2018). Urban renewal and redevelopment: social justice and property rights with reference to Hong Kong’s constitutional capitalism. Cities, 74, 240–248. https://doi.org/10.1016/j.cities.2017.12.010
Lee, C. C. (2010). The impact of facilities of leisure and sports on housing prices in Taiwan: an application of hierarchical linear modeling. Journal of Real Estate Practice and Education, 13(2), 159–175. https://doi.org/10.1080/10835547.2010.12091674
Lee, C. C., Liang, C. M., & Chen, C. Y. (2017). The Impact of urban renewal on neighborhood housing prices in Taipei: an application of the difference-in-difference. Journal of Housing and the Building Environment, 32(3), 407–428. https://doi.org/10.1007/s10901-016-9518-1
Liang, C. M., Lee, C. C., & Yong, L. R. (2020). Impacts of urban renewal on neighborhood housing prices: predicting response to psychological effects. Journal of Housing and the Built Environment, 15, 191–213. https://doi.org/10.1007/s10901-019-09673-z
Lin, T. T. (2000). Land prices and floor area ratios [Master’s thesis]. National Cheng Kung University, Graduate Institute of Urban Planning, Tainan City.
Mori, C. (2017). Social housing and urban renewal in Tokyo: from post-war reconstruction to the 2020 Olympic Games. In P. Watt & P. Smets (Eds.), Social housing and urban renewal (pp. 277–309). Emerald Publishing Limited. https://doi.org/10.1108/978-1-78714-124-720171008
Musakwa, W., & Niekerk, A. V. (2013). Implications of land use change for the sustainability of urban areas: a case study of Stellenbosch, South Africa. Cities, 32, 143–156. https://doi.org/10.1016/j.cities.2013.01.004
Nelson, J. P. (2004). Meta-analysis of airport noise and hedonic property values. Journal of Transport Economics and Policy, 38(1), 1–27.
Pov, S., Kawai, N., & Murakami, R. (2020). Identifying causes of lower secondary school dropout in Cambodia: a two-level hierarchical linear model. International Journal of Inclusive Education, 1–14. https://doi.org/10.1080/13603116.2020.1735542
Rosenthal, S. S. (2008). Old homes, externalities, and poor neighborhoods a model of urban decline and renewal. Journal of Urban Economics, 63(3), 816–840. https://doi.org/10.1016/j.jue.2007.06.003
Simons, R. A., & Jaouhari, E. A. (2004). The effect of freight railroad tracks and train activity on residential property values. Appraisal Journal, 72(3), 223–233.
Simons, R., Quercia, R., & Levin, I. (1998). The value impact of new residential construction and neighborhood disinvestment on residential sales price. Journal of Real Estate Research, 15(2), 147–161. https://doi.org/10.1080/10835547.1998.12090921
So, H. M., Tse, R. Y., & Ganesan, S. (1997). Estimating the influence of transport on house prices: evidence from Hong Kong. Journal of Property Valuation and Investment, 15(1), 40–47. https://doi.org/10.1108/14635789710163793
Sunak, Y., & Madlener, R. (2016). The impact of wind farm visibility on property values: a spatial difference-in-differences analysis. Energy Economics, 55, 79–91. https://doi.org/10.1016/j.eneco.2015.12.025
Uitermark, J., & Loopmans, M. (2013). Urban renewal without displacement? Belgium’s ‘housing contract experiment’ and the risks of gentrification. Journal of Housing and the Built Environment, 28(10), 157–166. https://doi.org/10.1007/s10901-012-9299-0
Uyar, B., & Brown, K. (2007). Neighborhood affluence, school-achievement scores, and housing prices: cross-classified hierarchies and HLM. Journal of Housing Research, 16(2), 97–116. https://doi.org/10.1080/10835547.2007.12091980
Wang, H., Shen, Q., Tang, B. S., & Skitmore, M. (2013). An integrated approach to supporting land-use decisions in site redevelopment for urban renewal in Hong Kong. Habitat International, 38, 70–80. https://doi.org/10.1016/j.habitatint.2012.09.006
Wilhelmsson, M. (2008). House price depreciation rates and level of maintenance. Journal of Housing Economics, 17(1), 88–101. https://doi.org/10.1016/j.jhe.2007.09.001
Xu, W., Jin, X., Liu, J., & Zhou, Y. (2021). Analysis of influencing factors of cultivated land fragmentation based on hierarchical linear model: a case study of Jiangsu Province, China. Land Use Policy, 101, 105119. https://doi.org/10.1016/j.landusepol.2020.105119
Yalpir, S., & Bayrak, E. (2017). Real estate valuation in urban regeneration application: case study of Konya. Selcuk University Journal of Engineering, Science and Technology, 5(1), 96–103. https://doi.org/10.15317/Scitech.2017.73
Yau, Y., Wong, S. K., Cheung, K. C., Chau, K. W., & Ho, D. C. W. (2006). An empirical study on the neighbourhood effect of refurbishment [Conference presentation]. Proceedings from the Pacific Rim Real Estate Society Conference 2006. Pacific Rim Real Estate Society.
Zahirovich-Herbert, V., & Gibler, K. M. (2014). The effect of new residential construction on housing prices. Journal of Housing Economics, 26, 1–18. https://doi.org/10.1016/j.jhe.2014.06.003
Zheng, X., Li, J. X., Zheng, L., & Lv, J. (2020). Multi-owned property, urban renewal and neighborhood property value externalities: revisiting the Hong Kong case. Cities, 107, 102915. https://doi.org/10.1016/j.cities.2020.102915
Zient, J., Zient, E. N., & Sirmans, G. S. (2008). Determinants of house prices: a quantile regression aggregation bias. Journal of Real Estate Finance and Economics, 37(4), 317–333. https://doi.org/10.1007/s11146-007-9053-7